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INTERNET MARKETING AND E-TAILING

GROUP PROJECT PART-1

Submitted to:
Prof. Nimit Gupta
Submitted by:
Abhishek Pramanik (PGFA1103) Aamukta (PGFA1101)
Jyoti Anand (PGFA1121) Reema Srivastav (PGFB1137) Sameer Vivian Joseph (PGFB113
9)
Table of contents

Introduction ...................................................................
...................................................................3

About ..........................................................................
......................................................................4
Funding .....................................................................
................................................................... 4
Acquisitions ................................................................
.................................................................. 5
Business Results ............................................................
............................................................... 6
Locations ...................................................................
................................................................... 6
Cash on delivery ............................................................
............................................................... 6
COD Target ..................................................................
................................................................. 6
3 pillars....................................................................
..................................................................... 6
USP .........................................................................
...................................................................... 7
Customers ...................................................................
................................................................. 7
STP..........................................................................
...................................................................... 7
Positioning: ................................................................
.................................................................. 7
Marketing Strategies:........................................................
........................................................... 7
Poters 5 forces .............................................................
................................................................ 8
SWOT : ......................................................................
................................................................... 9
7 Ps of marketing ............................................................
............................................................ 9
Market Share ...................................................................
....................................................................... 11
Competitors Analysis ...........................................................
.................................................................. 13

Introduction
Flipkart is an Indian e-commerce company headquartered in Bangal
ore, Karnataka. Its being touted as Indias answer to Amazon. Founded by Sachin Ban
sal and Binny Bansal (not related to each other) in Oct 2007, Flipkart has catap
ulted to one of Indias most popular e-commerce sites and undoubtedly as
the most popular online destination for books within a short span of three years
.

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About
Flipkart was established in 2007 by Sachin Bansal and Binny Bansal, both alumni
of the Indian Institute of Technology Delhi. They worked for Amazon.com before q
uitting and finding their own company. Initially they used word of mouth marketi
ng to popularize their company. A few months later, the company sold its first b
ook on flipkart.com - John Woods Leaving Microsoft to Change the World. Today,
as per Alexa traffic rankings, Flipkart is among the top 30 Indian web sites and
has been credited with being India s largest online bookseller with over 11 mil
lion titles on offer. Flipkart broke even in March 2010 and claims to have had a
t least 100% growth every quarter since its founding. The store started with sel
ling books and in 2010 branched out to selling CDs, DVDs, mobile phones & access
ories, cameras, computers, computer accessories and peripherals, pens & office s
upplies, other electronic items such as home appliances, kitchen appliances, per
sonal care gadgets, health care products etc.
Interesting Statistics about the company
As of today, Flipkart employs over 4500 people
It experiences 2 million unit sales and 4 million unique visitors per month w
ith sales growing at 25% per month, eyeing a $50 million run rate
With close to 11.5 million titles, Flipkart is the largest online book retail
er in India with
80 per cent market share
It has a registered user base of two million customers and ships out as many
as 30,000 items a day, clocking daily sales of Rs 2.5 crore
Flipkart is rapidly expanding its network of warehouses, dist
ribution centers, procurement operations and 24/7 customer support teams. The
company even has its own delivery network in 27 cities and is set to expand this
even further by next year
What sets it apart?
With path-breaking features like Cash/Card on Delivery, 30 Day replacement polic
y and EMI options, Flipkart has now made it possible for anyone across the count
ry with internet access to shop online. The Flipkart experience is characterized
by the intuitive user .

Funding
The company was initially self-funded, with co-founders Sachin and Binny Bansal
spending Rs
400,000 ($9056) to setup the business. They later raised two rounds of funding f
rom Accel Partners and Tiger Global Management to the tune of $31 million, with
the first round being around $10 million and the second round being $20 million.

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Acquisitions
2010
WeRead, a social book discovery tool. The stated goal was to give Flipkart a soc
ial recommendation platform for buyers to make informed decisions based on recom
mendations from people within their social network.
2011
Mime360, a digital content platform company.
2011
Chakpak.com is a Bollywood news site that offers updates, news, photos and video
s. Flipkart acquired the rights to Chakpaks digital catalogue which includes 40,0
00 filmographies, 10,000 movies and close to 50,000 ratings. Flipkart has catego
rically said that it will not be involved with the original site and will not us
e the brand name.
2012
Letbuy.com is Indias second largest E-retailer in electronics. Flipkart bought th
e company for an estimated US$ 25 million.

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Business Results
Flipkart s reported sales were 4 Crore in FY 2008-2009, 20 Crore in FY 2009-2010
and 75 Crore for FY
2010-2011. In FY 2011-2012, Flipkart is set to cross the 500 Crore (US$ 100 mill
ion) mark as Internet usage in the country increases and people get accustomed t
o making purchases online. On average, Flipkart sells nearly 20 products per min
ute and is aiming at generating a revenue of 5000 Crore (US$ 1 billion) by 2015.
Locations
The company s headquarters is located in Bangalore s Koramangala neighbourhood.
Flipkart has offices, warehouses and customer service centres across India. Ware
houses are located in the following cities, often near airports.
Bangalore, Karnataka
Chennai, Tamil Nadu
Delhi
Kolkata, West Bengal
Mumbai, Maharashtra
Noida, Uttar Pradesh
Pune, Maharashtra
Kochi, Kerala

Cash on delivery
The COD should be more than 50K
EMI min 4K period is 3 or 6 months
If in 72 hours the rate decreases then the extra money will be paid back
COD Target
Students / people with no debit and credit cards
Geographically small town people
3 pillars
Website to get queries and orders

Suppliers book distributor


Logistics courier service tie ups

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USP
Usability
Support
Model is partnership with local book vendors
Customers
Price sensitive
Experimental shoppers
Trust is the most need full thus their first product was books cheap and easy to
delivery.
STP
Segmentation:
All internet users and shoppers
Target:
Flipkart concentrates on more Psychographic, which helps in deciding where to
display ads online
They target online shoppers and people who dont online shop (thus TVC to encou
rage
them)
Positioning:
Customer delight (low price, free shipping, replacement of faulty products)
No kidding no worries
Online megastore
One stop solution
Marketing Strategies:
Word of mouth (initial marketing even now they want to satisfy customer so th
ey come back for more)
Good use of SEO
We DONOT sell old books or used books. All the books listed at Flipkart.com ar
e new books. The books listed at Flipkart.com are NOT available for free downloa
d in ebook or PDF format
Thus when you search free ebooks or pdf books old or used books flipkart will
be displayed.
Good use of SEM
Ads at proper places and use pay per click to pay for ads

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Very easy web interface
Payment convenience
Cash/card on delivery there by encouraging students and people with no credit/d
ebit card to purchase in flipkart, with mobile internet penetration there is cha
nces of capturing rural market (60% revenue by COD)
EMI two types of installments (3 / 6 months) there by targeting price sensitive
customers
Wallet customer can recharge money online and purchase then and when needed tho
se entering details always is rectified, target heavy purchase and luxury custom
er
Customer conversion rate is so high more than 70%
Personalization of the user page
Product recommendation with your previous purchases
Poters 5 forces
Bargain power of suppliers (low)
The readers are reducing thus suppliers are in weak position
Inventory turnover is lower, thus more inventory again flipkart is at the upp
er hand
Bargain of buyers (high)
Not many buyers
Best deals online
Cash on delivery
One stop solution
Faster delivery with free shipping cost
Threat of New entries (high)
Market potential for this industry is high
Low entry barriers, but sustaining is tough
Threat of substitutes (Low)
Diminishing brick and mortar model
Increasing customer ease and customer satisfaction
Industry rivals (Medium)
Many small players (snapdeal, naaptol ..)
Entry of international players like Amazon into India

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SWOT :
Strength
Top Indian ecommerce portal
Diversified into electronic goods
Two VC investment to build its own delivery system thereby reduce delivery ti
me
Cash on delivery which is making 60% of its income

Weakness
Coordination with suppliers and courier was tough
Price biasing to maintain the margins ( eg. Low price for the best seller boo
k and more price for the least wanted)
24/7 customer care, thus even mid night is to delivered within 24 hours
Opportunities
Already working towards customer delight will obtain customer loyalty gradual
ly
Supplier database interface with flipkart website for JIT procurement
Mobile internet usage is increasing there by chances of increase in sales thr
ough mobile shopping.
Threats:
Small players and emerging competitor
Major players like Amazon
In capabilities to manage certain costs like delivery cost, bank charges
7 Ps of marketing
Product :
Appearance the ease in the website interface even for the first visitor
Quality checking of the product before packing (visual test)
Packing different packing(eg. Bubble pack for electronic items)
Brands all brands integrated in one website
Warranty one year warranty from the manufacturers side
Service & support guarantee delivery of undamaged product or else replacement
in 30 days.

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Price:
Special discount
As shipping is within India the shipping cost reduces
Seasonal discounts
Free shipping
For expensive products transit cost is borne by company
Place:
Tie ups with local vendors and courier firms (thereby avoiding octroi charges
)
Company owned warehouse in major cities near airport
Trying to achieve minimum returns
If the courier cant delivery to the location the product is shipped through go
vernment

post
Promotion:
SEO and SEM
Word of mouth marketing
TVC lately to encourage non-online shoppers
More online marketing like FB, Twitter, linkedin
Hiring people with high sense of ownership, generalist with more attitude to
learn
Packaging:
Different packaging for different product to ensure safe delivery
Flipkart the name goes with the online cart
Design and packaging is common so customers can relate it to the company
Positioning:
Customers feel Flipkart is cheap, on time delivery, replacement; the online m
yth is gradually eradicated
Competitors see Flipkart as the market leader, with the acquisition of letsbu
y.com
General public want to try it once for its creative TVC is making people curi
ous to experience flipkart.
People:
Service people, Sales Clerks, Delivery drivers, Managers, Complaints departme
nt, Accounting, Warranty people, Technical people, all work for the customer eas
e, customer satisfaction and customer delight.

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Market Share

Retail category penetration has increased to 60% reach and has grown to 37.5 mil
lion unique visitors
a month, an overall growth of 43% annually. The growth has come across all retai
l categories and most of them show promising transactions and conversion rates a
long with growth in visitors. The top retail sites shown above in India have eac
h seen a growth of over 100% in the last 12 months.

Amazon is the most visited retail site with most of the traffic slipt among Amaz
on.com, ImDB and
Junglee.com.
Flipkart leads the way among the online retailers in India with 7.4

million unique visitors a month,growing at 431% annually. Snapdeal has been c


lose second with 6.9 million uniques. Jabong and Myntra have been competing clos
ely in the lifestlye category with over 5.3 million uniques each. HomeShop18 has
over 4 million uniques a month.

Apparel has been the


f a s t e s t g r o w i n g subcategory in retail and reaches 13.4% online users
i n I n d i a . Comparison shopping, as research of
retail online grows continue to dominate. Most of the

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comparison shopping sites show a growth over 75% Y-o-Y and will continue to grow
as more categories of retail come online. Travel category has shown this trend
with high overlap among OTAs and this trend is expected among online retailers a
s well.
Consumer goods, sports/outdoor products and retail food sub categories have also
shown early growth signs. Consumer goods being a popular category among horizon
tal retailers is still way below global averages.
Flowers/gifts/greetings is the only subcategory which has shown de-growth of ove
r 33% in the last 12 months.
Vertical e-Commerce categories including baby products, apparel, shoes and other
lifestyle categories have also shown tremendous growth. Wider assortment and pr
oduct availability have helped these retailers in growing business online.
More retailers online have heavily depended on online marketing to sca
le. The online marketing spends across all content categories and effective ma
rketing campaigns reaching out the right target audience have increased visitati
on and hence conversion among retailers.
The average transaction sizes among some of the top retailers are as below:

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Competitors Analysis

Ecommerce India and Google Trends


(Graph from Google Trends: Interesting tit-bit try region as India & watch for
the tricks from
Flipkart & Infibeam in 2009)
Now watch carefully for the patterns.
Infibeam is flat.
Infibeam and Myntra arent growing enough compared to their competitors.
Myntra had some traffic back in 2010 and went flat for next 1.5 years.
Flipkart did its rocketing in Oct 2012 when they started advertising on TV a
nd then on a good upward projectile.
Flipkart grew rapidly in 2011 traffic peaked from Oct 2011 till April 2012 [
The Panda raid].
If you looked at India only growth Flipkart probably got significant India t
raffic only with TV
ads & not before.
The most gaping fact of the entire graph - Jabong got all the traffic that flipk
art took 6 months to build from TV in the last 2 months.

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The TV ad is great. Indians love drama, dont we? And that has probably got more l
ikes and mental note than the creative & cheerful ads of flipkart (they were cut
e but still not there yet for India). Sadly enough, Myntra hasnt been able to get
even a small bump in its traffic all these days with Crores poured into TV camp
aign.
So was it the awesome TV ad? Of course not. As someone rightly commented on plug
gd.in post
its probably the effect of aggressive email marketing (call it spam). There are
many others who have done that in India fashionandyou, crazeal etc.
Either way, today, Jabong leads in the market share of visitors in retail ecomme
rce.
What are the other Internet sites who advertise on TV? All the listing sites so
let us see where they stand olx, quickr, sulekha.. You will be in for a surprise
.

Classified vs. Ecommerce Traffic in India


Quikr.com has almost double the traffic as OLX.in and even Flipkart.com
If you check the estimates from Google Ad Planner (which are actually very c
lose to real numbers from what I know) quickr has 9% penetration in India while
Flipkart has 4.3%
So all the listing sites are quite ahead of Flipkart & Jabong in capturing visit
ors. Want to know who the big guy is it isnt any of the travel portals or songs.p
k and not even espncricinfo.com
with all the IPL heat!

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Babylon: The Real Slim Shady of India Internet? Babylon.com the translation soft
ware!
Now, of course thats shady. It is a whopping 12% of India traffic as reported by
Google. Any marketers in the readers would now connect why Babylon.com is the 2n
d or 3rd popular source in their Organic Traffic in analytics

Source:

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